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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden) -- Ignore unavailable to you. Want to Upgrade?

To: Tomas who wrote (1421)	11/30/1999 10:29:00 PM
From: Tomas	Read Replies (1) \| Respond to of 2742

BHP's Papua New Guinea gas, oil assets likely to go to Orogen Sydney Morning Herald, December 1 By JANE COUNSEL BHP is believed to be close to finalising the sale of its Papua New Guinea oil and gas assets and investment group Orogen Minerals is emerging as the likely buyer. BHP is expected to conclude the sale, which it has yet to confirm is on the market, within the next two to three weeks, now that it has entered the final round of negotiations with several interested parties remaining. Santos, which is seeking to build its exposure in PNG, is understood to have made the final round, along with Orogen, New Zealand group Fletcher Challenge and Marubeni Corp of Japan. The assets being sold include a 9.7 per cent interest in the Kutubu oil and gasfield and the nearby Gobe oil and gasfield, and Kutubu's associated exploration leases. Analysts expect the assets will attract a price of between $250 million and $350 million, though there had also been the suggestion that BHP may have been looking to gain greater value from the sale by selling the oil and gas assets separately. That option is considered unlikely, however, given the logistical difficulty for the likely buyers and the lack of synergies that could be achieved. These assets are for sale as part of BHP's asset review, which has led to the company disposing of more than $1billion in assets under the guidance of new chief executive Mr Paul Anderson. Orogen is a logical likely buyer, given the company's existing holdings in the Kutubu and Gobe fields and its interest in the Chevron-led PNG-to-Queensland gas pipeline. Kutubu, which produces around 40,000 barrels of oil a day, and the nearby Hides field are planned to supply the gas for the pipeline project, and host substantial gas reserves. By selling to Orogen, in which the PNG Government is the controlling shareholder, BHP would be able to demonstrate it is keen to maintain its good relationship with the PNG Government, given the uncertain future of its Ok Tedi copper-gold mine. Investors had speculated that a deal with Orogen on the oil and gas assets could possibly have involved Orogen also purchasing BHP's equity in Ok Tedi, but this is not considered likely now, given that the World Bank review of the project is not expected to be finalised until mid-next year. Orogen is understood to have been keen to ensure it gained control of the BHP oil and gas assets in PNG, although Santos was also believed to have been a keen bidder, given that control of the assets would present it with the opportunity to build its oil inventory and to increase its presence in PNG, where it already has a 25 per cent stake in the Hides gasfield. smh.com.au